The Minister of Infrastructure, Pedro Nuno Santos, said today that TAP may currently have a larger dimension than it will need in the coming years, which is one of the conditions of the European Commission to approve support.
“We can now have a company with a larger dimension than what is needed in the coming years. This is a condition of the European Commission ”, said the Minister of Infrastructure and Housing, at a press conference in Lisbon, after the announcement of the approval of the European Commission for state support to TAP in the maximum amount of 1.2 billion euros. euros.
However, the minister said he believed it was possible to present to the European Commission “a good case” that does not result in an “excessive restructuring of TAP”.
Stressing the need to adjust the dimensions of the airline to its future needs, Pedro Nuno Santos admitted that “it would not be serious” to try to convey the idea that a restructuring of the air carrier can be done without consequences, for example, in fleets and workers .
“The Portuguese government does not want a small TAP, nor a TAP with the size necessary to meet the needs of the economy”, guaranteed the government official.
To this end, he said, the airline’s Executive Committee has to demonstrate, in the coming months, that the company is viable in the medium and long term.
The Portuguese State today received authorization from the European Commission to support TAP in an amount of up to 1.2 billion euros, but, according to the minister who oversees aviation, the Government expects not to need more than 1 billion euros until at the end of this year.
What is still missing is the decision by private shareholders to accept the conditions presented by the State to make this intervention.
It is an injection of capital in the form of a loan, made by tranches, but, according to Pedro Nuno Santos, the possibility of a private loan guaranteed by the State is not excluded at a later stage.
“It is natural that a restructuring plan presupposes the company’s capitalization. […] It is nowhere that the State has to be the only one to capitalize the company ”, added the minister.
The official reiterated that, in the context of the intervention designed for TAP, the State will have greater control over financial management, that is, over the destination that will be given to the money injected into the company.
Also present at the press conference, the outgoing Treasury Secretary of State, Álvaro Novo, clarified that, although TAP is expected to reimburse the State in six months, if a restructuring plan is presented that is accepted by the European Commission, there are the possibility of extending that period.
If TAP returns the money that the State injects in six months, it will not be necessary to present a restructuring plan.
However, Álvaro Novo admitted that “it is unlikely that TAP will be able to repay the loan”.
On April 2, TAP resorted to the simplified lay-off program, made available by the Government as one of the measures to support companies suffering from the effects of the covid-19 pandemic.
The company has been in an aggravated financial situation since the beginning of the crisis caused by the covid-19 pandemic, with the operation almost completely paralyzed, and state intervention in the company has been debated.
In a hearing at the Assembly of the Republic, Pedro Nuno Santos said that TAP’s debt amounts to 3.3 billion euros.
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